Trump signs executive orders after coronavirus relief talks falter
President Trump on Saturday signed orders to extend unemployment benefits, suspend payroll taxes, and offer federal eviction and student loan relief, taking unilateral action that is on shaky legal ground amid stalled negotiations about a fifth round of coronavirus relief in Congress.
The president announced the slew of executive actions from his private club in Bedminster, N.J., where he is spending the weekend after lawmakers on Capitol Hill were unable to reach an agreement with White House negotiators.
The president was not physically present for any of the talks over the last few weeks, but has said he received regular updates from his staff.
One memo extends the enhanced unemployment benefits that expired roughly two weeks ago and have been critical to millions of Americans out of work due to the pandemic. The benefits will be lowered from $600 to $400 per week, with states required to cover 25 percent of the cost, Trump said.
Another of the orders directs the Treasury Department to allow employers to defer payment of employee-side Social Security payroll taxes through the end of 2020 for Americans earning less than about $100,000 annually. The text of the executive order states that the intended deferral period would start Sept. 1, but Trump suggested that it could be retroactive to Aug. 1. Trump also said that he hoped to forgive the deferred payroll taxes and make permanent payroll tax cuts if he is reelected in November.
“If I win, I may extend and terminate,” Trump said. “In other words, I’ll extend it beyond the end of the year and terminate the tax.”
Two additional orders defer student loan payments through the end of the year and aim to minimize evictions from federal housing, though the latter does not explicitly halt evictions.
“Through these four actions my administration will provide vital relief to Americans struggling during this difficult time,” Trump said, reading from prepared remarks.
Experts have questioned Trump’s authority to unilaterally intervene on unemployment benefits and the payroll tax, and his actions on Saturday may face legal challenges. But Trump shrugged off questions about the the legality of the orders late Friday.
“I mean, everything you do, you get sued,” he said. “So we’ll see. Yeah, probably we get sued, but people feel that we can do it.”
Trump signed the orders from a ballroom at his private club, where members looked on for a second straight day. The crowds appeared to violate social distancing guidelines in New Jersey, though most onlookers wore masks.
Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows told reporters Friday that they would recommend Trump move forward with executive actions over the weekend, following what was described by both sides as an unproductive meeting with House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer (D-N.Y.).
The president had for days teased that he was prepared to sign the executive orders, raising questions about whether it was merely a negotiating tactic. But White House officials viewed the unilateral action as a way for Trump to take action and distinguish himself from the dysfunction on Capitol Hill.
The White House and congressional Democrats have remained unable to come to an agreement on the next stimulus package, and each side has pointed fingers at the other over the stalemate.
Republicans have balked at the price tag of Democrats’ proposal — the House passed a $3.4 trillion measure back in May — and opposed the amount requested for cash-strapped state and local governments. Democrats said they offered to reduce the price of their proposal by $1 trillion but were rebuffed by the Trump administration negotiators.
Trump, who has made the economy a central focus of his reelection effort, began signaling over the past week that he was prepared to act unilaterally on economic priorities should the virus relief talks stall. In a tweet Friday evening, he accused Pelosi and Schumer of being interested only in “Bailout Money for poorly run Democrat cities and states” and declared that he would be going “a different way.”
Senate Majority Leader Mitch McConnell (R-Ky.) said in a statement Saturday that he supports “President Trump exploring his options to get unemployment benefits and other relief to the people who need them the most.” McConnell also accused Democrats of sabatoging negotiations over a relief package.
Democrats quickly criticized Trump’s orders.
“Today’s meager announcements by the President show President Trump still does not comprehend the seriousness or the urgency of the health and economic crises facing working families,” Pelosi and Schumer said in a joint statement. “We’re disappointed that instead of putting in the work to solve Americans’ problems, the President instead chose to stay on his luxury golf course to announce unworkable, weak and narrow policy announcements to slash the unemployment benefits that millions desperately need and endanger seniors’ Social Security and Medicare.”
“Donald Trump is trying to distract from his failure to extend the $600 federal boost for 30 million unemployed workers by issuing illegal executive orders,” said Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee.
The president’s decision to lower unemployment benefits to $400 per week comes as some Republicans viewed the $600 allotment as a disincentive to return to work. Trump shrugged off the idea that the decrease could hurt Americans who have come to depend on the payments during the pandemic.
“No it’s not a hardship. This is the money they need,” he said. “This is the money they want. This gives them an incentive to go back to work.”
Requiring states, many of which have seen revenue dry up due to the pandemic, to cover part of the unemployment benefits is likely to irk some governors. But the president suggested he would offer no assistance, saying states could find money left over from the last relief package.
“That’s going to be their problem,” Trump said.
Trump’s action followed the release of Labor Department figures showing that the U.S. added 1.8 million jobs during the month of July and saw a decline in the unemployment rate to 10.2 percent. The figures exceeded expectations; however, economists have underscored the need for more federal assistance to aid the ailing economy.
Trump has been pushing for a payroll tax cut for months.
The White House argued that a payroll tax cut would provide incentives for workers to get back to work and reward individuals who stayed at work during the coronavirus pandemic while cutting the cost of business.
However, both Republicans and Democrats in Congress have been cool to the idea. Critics of the idea say it wouldn’t do anything to help people who are unemployed, and they note that payroll tax revenue goes to the Social Security and Medicare trust funds.
Employees and employers each pay Social Security payroll taxes of 6.2 percent of wages and Medicare payroll taxes of 1.45 percent of wages.
Congress has already taken steps to provide some payroll tax relief for employers. Trump signed legislation in March that allows employers to defer paying Social Security taxes and creates a payroll tax credit for businesses that continue to pay workers wages and health benefits. Lawmakers on both sides of the aisle are interested in expanding the credit.
Joe Bishop-Henchman, vice president of tax policy and litigation at the right-leaning National Taxpayers Union Foundation, said in a paper released Friday that “there are many potential legal challenges associated with a unilateral Presidential payroll tax suspension.” And he said that even if it were clear that Trump has the legal authority to suspend payroll taxes by executive action, such a move would raise questions for businesses.
“Without detailed answers to some of these questions, employers might just steer clear of all of it by continuing to do what they’ve always done, blunting the desired economic impact of reducing taxes,” Bishop-Henchman wrote. “A payroll tax delay or reduction might be worthy of consideration as a way to reduce the tax burden associated with employment, but its path would be infinitely clearer if it was mapped out by Congress in statute rather than in an executive order.”
Updated 7:52 p.m.